FRANKFURT, May 17 (Reuters) – Germany’s Commerzbank (CBKG.DE) said on Wednesday that its net profit nearly doubled in the first quarter, beating expectations, but the prospect that income from higher interest rates had reached a peak drove its shares sharply lower.
The bank’s shares traded 7.3% lower at 0750 GMT, making it the worst performer on the DAX blue chip index.
Finance chief Bettina Orlopp told analysts net interest income had probably peaked in the quarter and that further provisions for its mBank unit in Poland were possible.
Net profit rose to 580 million euros from 298 million a year earlier, topping the 481 million expected by analysts in a consensus forecast published by Commerzbank.
The bank said it sees “upside potential” in net interest income this year, and raised its forecast to 7 billion euros ($7.7 billion) from 6.5 billion. The increased forecast was still below the expectations of some analysts.
One of Germany’s best-known banks, Commerzbank is in the middle of a major overhaul, cutting thousands of workers and hundreds of branches to save costs and lift profits.
Many banks have reported increases in first-quarter revenue and profit helped by higher interest rates.
JPMorgan called the results strong but said the bank’s increased guidance for net interest income was below market expectations and “would limit any upgrades” in analyst forecasts.
Last year, Commerzbank booked a second consecutive year of profit, and the bank rejoined the prestigious DAX index.
The bank is partly owned by the government following a bailout during the financial crisis more than a decade ago, and analysts have said that it is vulnerable to soaring inflation, a slower economy and potentially soured loans.
“Commerzbank is in good shape. Our transformation is making good progress and is increasingly paying off,” Chief Executive Officer Manfred Knof said.
($1 = 0.9084 euros)
Reporting by Tom Sims and Frank Siebelt, Editing by Rachel More
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